In its annual report to Congress, the SEC announced that its whistleblower program set records in number of awards made, amount of dollars awarded, and number of whistleblower tips the SEC received. The SEC Whistleblower Program was created more than 10 years ago as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The program was established to aid the SEC in bringing actions against corporations that defraud the investing public and help those victims of securities fraud recover money.
Since its inception, the SEC has issued more than 214 individual awards totaling more than $1.1 billion, with the award pace rapidly accelerating. The SEC announced that this year alone, the Commission made more awards than in all prior years combined.
The whistleblower program provides awards to those who provide information directly to the government that leads to successful actions against the offending corporation. Whistleblowers with vital information are entitled to no less than 10% and no more than 30% of monetary sanctions over $1 million. To ensure defrauded investors are made whole by the recovery, the whistleblower is paid from a separate fund than the money collected by the SEC called the Investor Protection Fund.
Source: 2021 Annual Whistleblower Program Report to Congress
The SEC Whistleblower Program was designed to ensure the confidentiality by allowing whistleblowers represented by an attorney to provide tips to the SEC anonymously. Regardless of whether a tip is provided anonymously, whistleblowers who report possible securities law violations are protected against retaliation by their employer.
About Faruqi & Faruqi, LLP
Faruqi & Faruqi, LLP focuses on complex civil litigation, including securities, antitrust, wage and hour and consumer class actions as well as shareholder derivative and merger and transactional litigation. The firm is headquartered in New York, and maintains offices in California, Georgia and Pennsylvania.
Since its founding in 1995, Faruqi & Faruqi, LLP has served as lead or co-lead counsel in numerous high-profile cases which ultimately provided significant recoveries to investors, direct purchasers, consumers and employees.
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Faruqi & Faruqi
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